Risk Management and Insurance ^{7th Ed.}

This text examines risk management in organizations, rather than personal insurance, and offers a balanced presentation of institutional and statistical material. The book provides a problem-solving approach to the subject and is student-centred with examples and cases. It includes material relevant to private, public and non-profit organizations and examines personal benefits, such as life and health insurance and pensions within the context of the organization.

• Part One: An Overview of Risk and Management
1. An Introduction to Risk and Uncertainty
• Learning Objectives
• Introduction
• Essential Concepts: Certainty, Uncertainty, and Risk
• Some Further Concepts Related to Risk
• Pure and Speculative Risks
• Diversifiable and Nondiversifiable Risks
• Some Further Issues Issues Related to Uncertainty
• Levels of Uncertainty
• The Response to Uncertainty
• Uncertainty, Information, and Communication
• Two Specific Concepts Related to Uncertainty
• Risk, Uncertainty, and Morality
• Managing Risk and Uncertainty
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
2. An Introduction to Risk Management
• Learning Objectives
• Introduction
• Historical Development of the Risk Management Function
• Early Post-World War II
• Post-1960
• Risk Management Today
• Evidence of Current Risk Management Practices
• The Nature of Risk Management Activities
• The Nature of the Risk Management Function
• Organizational Risk Management
• The Strategic, Operations, and Risk Management Model
• Elements of Organizational Risk Management
• The Placement of the Risk Management Function
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
• Part Two: Assessing Risk
3. Risk Assessment I: Risk Assessment Fundamentals
• Learning Objectives
• Introduction
• Risk Identification
• Methods of Risk Identification
• A Framework for Identifying Potential Risks
• Application of Checklist
• Hazard and Loss Analysis
• Accident Causation
• Loss Analysis
• Hazard Analysis
• Risk Measurement
• Hidden Costs of Accidents
• Dimensions of Exposure to Risk
• Loss-Frequency Measures
• Loss-Severity Measures
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
• Appendix 3.1: Assets-Exposures Analysis
4. Risk Assessment II: Quantitative Methods in Risk Assessment
• Learning Objectives
• Introduction
• Importance of Numerical Estimates
• Budget Settings
• Estimation of Future Effects
• Claim Estimation
• Sources and Types of Data
• Exposure-Based Loss Development Methods
• Timing of Claim Payments
• Estimates of Precision
• MPC Estimation in a Single Time Period
• Basic Probability Concepts
• Probability Distributions
• Summary Statistics Where Full Data Are Not Available
• Probability Distributions and Measures of Risk
• The Accuracy of Estimates
• A Word of Caution
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
5. Property Exposures to Risk
• Learning Objectives
• Introduction
• Types pf Property Exposures
• Property Class
• Cause of the Exposure Outcome
• Direct, Indirect, and Time Element Outcomes
• Interest in Property
• Valuation of Potential Property Losses
• Methods for Valuing Owners' Property Exposures
• Methods of Valuing Other Interests
• Time Element Losses: A Further Look
• Decreases in Revenues
• Increases in Expenses
• Property-Loss Frequency and Severity Data
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
6. Liability Exposures to Risk
• Learning Objectives
• Introduction
• A Brief Introduction to Law
• Sources of Law
• Types of Law
• Issues in the Legal Process of Civil Actions
• Specific Liability Problem Areas for Organizations
• Tort Law
• Intentional torts
• Unintentional Torts: Negligence
• Strict or Absolute Liability
• Liability Problem Area 1: Liability Arising from Ownership, Use, and Possession of Land
• Liability Problem Area 2: Liability Arising from maintaining a Public or Private Nuisance
• Liability Problem Area 3: Liability Arising from the Sale, Manufacture, and Distribution of Products or Services
• Liability Problem Area 4: Liability Arising from Fiduciary Relationships
  
• Liability Problem Area 5: Professional Liability
  
• Liability Problem Area 6: Agency and Vicarious Liability
  
• Liability Problem Area 7: Bailee Liability Exposures
  
• Liability Problem Area 8: Contract Liability
  
• Liability Problem Area 9: Employment Liability
  
• Liability Problem Area 10: Work-Related Injury
  
• Liability Problem Area 11: Motor Vehicle Liability
• Ethics, Law, and Their Relationship to Risk Management
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
7. Human Resource Exposures to Risk
• Learning Objectives
• Introduction
• Reasons for Concern of Risk Managers
• The Issue of Cost-Efficiency
• Sense of Employer Responsibility
• Public Relations
• Compliance with Government Regulations
• Employer-Sponsored Programs Can substitute for Welfare or Social Insurance
• A Word about Human Resource Exposure to Speculative Risks
• Assessing Exposures of Employee: Loss Frequency
• Mortality Rates
• Poor Health
• Old Age and Retirement
• Unemployment
• Assessing Loss Exposures: Loss Severity
• Potential Loss of Earnings: Human Life Value
• The Needs Approach
• Additional Expenses
• Assessing Direct Exposures of Organizations
• Key-Person Losses
• Credit Losses
• Business-Discontinuation Losses
• Appendix 7.1: Historical Perspective: Allocating the Burden of Misfortune and Poverty
• Premature Death
• Poor Health
• Excessive Longevity
• Unemployment
• Summary: Government- and Employer-Sponsored Programs in Society
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
• Part Three: Risk Management Methods and Techniques
• Section One: An Overview of Risk Management and Methods
8. Risk Control
• Learning Objectives
• Introduction
• What Is Risk Control and When Is It Used?
• The Relationship of Risk Control to Risk Assessment
• The Relationship of Risk Control to Risk Financing
• Risk Control and Speculative Risks
• Risk Control Tools and Techniques
• Risk Avoidance
• Loss Prevention and Loss Reduction
• Loss Reduction
• Information Management
• Risk Transfer
• Risk Control, Government and Society
• Private and Non-Profit Efforts
• Governmental Efforts
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
9. Risk Financing Techniques I
• Learning Objectives
• Introduction
• Types of Risk Financing Methods
• Retention
• Funding Arrangements
• Insurance Transfers
• Elements of an Insurance Transaction
• Pooling of Resources Contrasted with Pooling of Risk
• Pooling Agreements and Combinations
• Noninsurance Risk Financing Transfers
• Some Examples
• Hedging or Neutralization
• Considerations Affecting Choice between Retention and Transfer
• Legal, Economic, and Public Policy Limitations
• Degree of Control
• Insurance Loading Fees
• Value of Services Provided by Insurers
• Opportunity Costs
• Tax Considerations
• Retention May Be the Only Possible Method
• Summary
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
10. Risk Financing Techniques II
• Learning Objectives
• Introduction
• The Risk Financing Continuum
• Transfer or Mostly Transfer Techniques
• Guaranteed Cost Insurance
• Experience-Rated Insurance
• Retrospective Rating
• Transfer/Retention Techniques
• Consumer Proprietaries/Cooperatives
• Self-Insurance Pools
• Risk Retention Groups
• The Identity of Pool Participants
• Administrative Services Only (ASO)/Minimum Premium (MPP) or Stop Loss Plan
• Pooling through Taxing Authority
• Retention or Mostly retention Techniques
• Captive Insurers
• Finite or Risk Insurance Plans
• The Increasing Importance of Risk retention
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
• Section Two: Decision Methods: Objectives and Analysis
11. A Rationale for Risk Management in Organizations
• Learning Objectives
• Introduction
• Expected Utility and a Risk-Averse Individual's Demand for Insurance
• Limitations of an Expected Utility Rationale
• The Demand for Insurance in the Context of a Portfolio of Assets
• Limitations and Qualifications of Portfolio Approaches
• The Effects of Risk Management in a Frictionless Market
• The Function of Managers
• Questions Left Unanswered
• Frictionless Markets and Public Sector Risk Management
• Public Finance
• Proprietary and Governance Functions
• Governance Functions in Risk Management
• Insurance, Risk Management and Stakeholder Interests
• Managerial Incentives
• Corporate Insurance Purchases
• Summary: The Rationale for Insurance Purchases by Organizations
• Risk Management in Organizations
• How These Principles Can Explain Mortgage Insurance
• Appendix 11.1: The Value of a Commitment to Restore Damaged Assets
• Appendix 11.2: Taxation and Corporate Insurance Purchases
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
12. Risk Management Decision Methods: Data Organization and Analysis
• Learning Objectives
• Introduction
• Elements Common to Risk Management Problems
• Time Horizons
• Measuring Benefits and Costs
• Recognition of Uncertainty
• Data Credibility
• Recognition of Externalities
• Identification of Interdependency
• Reviewing Insurance Priorities
• Initial Listing
• Revised Listing
• Identification of Break-Even Points Limitations
• Limitations
• Willingness to Pay for Claims Management and Other Services Related to Insurance Coverage ("Worry Costs")
• Categories of Risk Management Costs
• Use of Insurance Data to Estimate Costs
• Worry Costs and the Nature of of the Exposure to Loss Limitations
• Evaluating Long-Term Projects in Publicly Held Corporations
• Valuation of a Project in an Efficient Market
• The Brealey-Myers Adjusted Present Value Method
• A Benchmark Valuation
• How Is the Value of the Beta Determined?
• Adjusting Estimated NPV for Possible Side-Effects
• Evaluating Long-Term Projects in the Public Sector
• Allocating Cost Burdens
• Use of Financial Ratios in Risk Management
• Leverage Ratios
• Liquidity Ratios
• Market-Valuation Ratios
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
• Part Four: Insurance Institutions and Coverages
13. An Introduction to the Insurance Industry
• Learning Objectives
• Introduction
• Four Conceptual Issues
• Benefits and Costs of Insurance
• Characteristics of Insured Risk
• Distinguishing Insurance from Gambling
• Distinguishing Insurance from Bonding
• Insurance Functions and Services
• Underwriting
• Inspection, Engineering, and Loss Prevention
• Investment
• Loss Adjustment
• Summary
• The Insurance Industry Today
• Types of Insurers
• Groups and Cooperative Reinsurance and Underwriting Associations
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
14. The Pricing of Insurance
• Learning Objectives
• Introduction
• Terminology and Basic Concepts
• Insurance Rate and Insurance Premium
• Pricing and Rating Procedure
• Claims Data
• Loading and Target Loss Ratio
• Other Factors Considered in Pricing Methods
• Pricing Objectives
• Basic Pricing Methods
• Loading Methods in Standard Insurance Products
• Loading in Claims-Servicing Agreements
• Dividends
• Principal Rating Procedures
• Individual or Judgment Rating
• Class Rating
• Modification Rating
• Rating Organizations
• Appendix 14.1: Pricing of Individual Life Insurance
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
15. Insurance Regulation and Financial Assessment
• Learning Objectives
• Introduction
• Overview of Insurance Regulation
• Reasons Why Insurance Is Regulated
• Level of Government at Which the Regulatory Function Exists
• Historical Development of State Insurance Regulation
• Development of Commission Regulation
• The Southeastern Underwriters Association Decision
• The Consequences of SEUA Decision
• Enactment of the McCarran-Ferguson Act
• Action by the States since 1944
• Action by the Federal Government since 1944
• The Structure and Functions of State Insurance Regulation
• Functional Organization of State Commissions
• General Statutory Powers and Duties
• State-Level Guaranty Associations
• Financial Assessment of Property-Liabilities Insurers
• Measures of Performance and Solvency
• The Issue of Reinsurance
• Financial Assessment of Life and Health Insurers
• Performance Assessment
• Appendix 15.1: An Introduction to Property-Liability Insurance Accounting
• Appendix 15.2: An Introduction to Life Insurance Accounting
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
16. Legal Aspects of Insurance Contracts
• Learning Objectives
• Introduction
• A Legal Definition of Insurance
• Requirements for a Valid Contract
• Distinguishing Features of Insurance Contracts
• Personal Contract
• Unilateral Contract
• Conditional Contract
• Aleatory Contract
• Contract of Adhesion
• Contract of the Utmost Good Faith
• Valued and Indemnity Contracts
• A Contract of Employing Subrogation
• Disclosure of Information by the Insured
• Breach of Warranty
• Misrepresentation
• Concealment
• Statutory Modifications
• Rights of Insured at Variance with Policy Provisions
• Waiver and Estoppel
• Reasonable Expectations
• Authority of Agents
• Agent's Authority to Commit Insurer to Coverages
• Agent's Authority in Accepting  Information Disclosed by Insureds
• Standardization
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
17. Insurance Contract Analysis: Property and Liability Coverage
• Learning Objectives
• Introduction
• Contract Analysis and Claims Negotiation
  
• Coverage Analysis, Risk Financing, and Risk Identification
• A Basic Consideration: Understanding Contract Structure
• The Initial review
• Major Section Headings
• A Framework for Analysis
• Property Insurance: Events Covered
• Perils Covered
• Property Covered
• Persons Insured
• Losses Reimbursed
• Locations Covered
• Time Period Covered
• Other Conditions Restricting Covered Events
• Property Insurance: Amount of Recovery
• Measure of Loss
• Insurable Interest
• Duplicate Coverage
• Contract Limits
• Coinsurance and Other Insurance-to-Value Requirements
• Deductible Clauses
• Property Insurance: Procedure for Securing Payment of Benefits
• Liability Insurance: Events Covered
• Situations Triggering Coverage
• Persons Insured
• Losses Reimbursed
• Locations Covered
• Time Period Covered
• Liability Insurance: Amount of Recovery
• Contract Limits
• Duplicate Coverage
• Excess-of-Loss Coverage
• Umbrella Liability Insurance
• Deductibles and Other Provisions for Loss-Sharing
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
18. Insurance Contract Analysis:Life Insurance
• Learning Objectives
• Introduction: Perspective for Analysis
• Basic Concepts Related to the Structure of Coverage
• Persons with an Economic or Legal Interest Identified in the Contract
• The Investment Element in Life Insurance
• The Source of the Investment Element
• Risks Borne by Parties to a Life Insurance Contract
• Allocation of Mortality Risks and Burdens of Adverse Selection
• Allocation of Investment Risks
• Traditional and Universal Life Coverage
• Summary
• Options and Other Features of Life Insurance
• Riders and Other Optional Benefits Purchased at Policy Issue
• Standard Contract Provisions
• Option Clauses
• Appendix 18.1: Evaluation of the Investment Element in Life Insurance
• Appendix 18.2: Evaluation of Life Insurance Products
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
19. Insurance Contract Analysis:Health Insurance
• Learning Objectives
• Introduction
• Moral Hazards and Health Insurance
• Insurance for Health Care Services
• Events Covered
• Form of Recovery
• Form of Recovery and Types of Insuring Organizations
• Contractual Provisions Affecting Amount of Recovery
• Direct Controls
• Summary
• Insurance for Loss of Income: Basic Concepts
• Events Covered
• Amount of Recovery
• Renewal Provisions
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
• Part Five: Topics in Risk Management Administration
20. An Overview of Risk Management Administration
• Learning Objectives
• Introduction
• Policies and Procedures
• Risk Management Policy Statement
• Organizations
• Manuals
• Information Management
• Risk Communication
• Risk Management Information Systems
• Reporting
• Allocation Systems
• Contracted Service Management
• Management of Agents/Brokers
• Bidding
• Certificates of Insurance
• Security for Risk Financing Programs
• Claims Supervision
• Property Claims
• Third Party or Liability Claims
• Human Resource Claims
• Discussion
• Program Review and Monitoring
• Ongoing Monitoring
• Program Audits
• Appendix 20.1: One Suggested Outline for a Risk Management Manual
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
21. Property and Liability Insurance Contracts
• Learning Objectives
• Introduction
• Property and Liability Coverage
• The Commercial Property Coverage
• Crime Insurance
• Commercial Boiler and Machinery Coverage
• Marine Insurance
• Commercial General Liability Coverage
• Automobile Coverage
• Other Property and Liability Insurance
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
22. Social Insurance
• Learning Objectives
• Introduction
• What Is Social Insurance?
• Social Security, Social Insurance, and Public Assistance
• Is Social Insurance "Insurance"?
• Reasons for Social Insurance
• Social Insurance Systems of the United States
• Old-Age, Survivors and Disability Insurance
• Eligibility Requirements
• Benefits
• Future Changes and Changes Already Enacted
• Taxes
• Funding
• Issues
• Medicare
• Hospital Insurance
• Supplementary Medical Insurance
• National Health Insurance Proposals
• Unemployment Insurance
• The Role of the Federal Government
• State Programs
• Some Important Issues
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
23. Workers' Compensation and Workplace Safety
• Learning Objectives
• Introduction
• Common Law Liability for Employers
• Workers' Compensation Theory and Practice: 1911 to Present
• National Commission on State Workers' Compensation Laws
• The Theory of Workers' Compensation
• Workers' Compensation Today
• Employments Covered
• Accidents and Diseases Covered
• Benefits
• Security Arrangements
• Workers' Compensation outside the United States
• Work Injury Compensation in Germany and Great Britain
• Current Systems around the World
• Current Issues and Problems with Workers' Compensation
• Rising Medical Costs
• Loss Control and Workers' Compensation
• The Expanding Definition of Compensability
• Fraud and Systems Abuse
• Workers' Compensation and Risk Management
• Loss Control
• The Americans with Disabilities Act and the Occupational Safety and Health Administration
• Workers' Compensation Claims Management
• 24-Hour Coverage
• Return-to-Work Programs
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
24. Employee Benefit Plans
• Learning Objectives
• Introduction
• Scope and Importance
• Life Insurance and Survivor Benefit Programs
• Yearly Renewable Term Insurance
• Survivor Income Benefits
• Group Paid-Up or Group Universal Life Insurance
• Other Life Insurance Benefits
• Health Benefit Programs, Including Disability Income
• Dental, Vision Care, and Prescription Drug Benefit Programs
• Temporary Disability Income Insurance
• Long-Term Disability Insurance
• Disability Provisions in Group Life Insurance Plans
• Disability Provisions in Pension Plans
• Sick-Leave Plans
• Retirement Income Programs
• Profit-Sharing Plans Contrasted with Pensions
• Defined Benefit Plans Contrasted with Defined Contribution Plans
• Other Factors Affecting Benefit Amounts
• Integration with OASI
• Cost-of-Living Adjustment (COLA)
• Eligibility Requirements
• Vesting Provisions
• Funding Levels
• Pension Plan Administration
• The Employee Retirement Income Security Act of 1974
• Pension Benefit Guaranty Insurance
• 401(k), 403(b), IRA, SEP, and Other Salary-Reduction Plans
• Flexible or "Cafeteria" Benefit Programs
• Typical Features of Group Benefit Programs
• The Concept of Group Underwriting
• Advantages and Disadvantages of Group Coverage
• The Conversion Privilege
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading
25. Design Issues in Employee Benefit Plans
• Learning Objectives
• Introduction
• Forces Affecting Program Design
• Desires of Employees
• Possible Effects on Behavior of  Employees and Service Providers
• Regulatory and Tax Environment
• The Organization's Mission
• Basic Decisions in Group Benefit Programs
• Eligibility Requirements
• Financing and Administration
• Information and Communication Systems in Benefit Programs
• Nonqualified Deferred Compensation and Retirement Plans
• Deferred Compensation
• Supplemental Executive Retirement Plan
• Key Concepts
• Review Questions
• References and Suggestions for Additional Reading

A very comprehensive book about the subject of insurance in the USA, but a bit hard to digest.

If you manage to get through it, you will as a Europena, probably be shocked over the state of the Insurance marketplace in the USA (but Public and Private). This is pre-ObamaCare, but I doubt very much has changed.

Interesting if you're into the subject, but otherwise, you may safely skip it.